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. The Terrapins Investment Fund has a total investment of $500 million in five stocks. Stock Investment (millions) Beta 1 $150 .6 2 120 1.2

. The Terrapins Investment Fund has a total investment of $500 million in five stocks.

Stock Investment (millions) Beta
1 $150 .6
2 120 1.2
3 80 3.0
4 90 1.8
5 60 1.0
Total $500

. Refer to the problem above. If the risk-free rate is 12% and the market risk premium is 6%, what is the required return on the Terrapins Fund?

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